Driver chip vendors gain from growing hi-res display devices

IHS Inc. has released a report indicating that the annual revenue for driver ICs will approach $6.8 billion in 2017 as a result of the demand for higher resolution displays in smartphones and other applications. Smartphones boasting full high-definition (FHD) and 4K-resolution displays are gaining momentum, which is remarkably contributing to the increase in driver IC revenue, added the market research firm.

"To increase revenues panel makers are trying to reduce the number of driver ICs in their displays," said Tadashi Uno, senior analyst and researcher for IHS Technology. "One way is to use driver ICs with more pins. While in the past the most popular source driver had 720 pins in the past, the latest driver ICs have more than 1000 pins, which drives down the number of driver ICs needed for each display."

Among the many types of display materials and components, the driver IC supply chain is unique, according to IHS. Most driver IC makers are "fabless" companies such as TSMC and UMC that contract out their production, rather than owning their own factories. Due to increased competition in the market, prices and profits for driver ICs dropped dramatically after 2007, which is why foundry makers have de-prioritised driver IC production.

IHS revealed that the annual revenue for driver ICs will hit $6.8 billion in 2017 due to the demand for higher resolution displays in smartphones and other applications.

"The lead time from order to delivery in the driver IC market is around three months," Uno said. "This timeframe is quite long, compared to other materials and components; however, driver IC order delivery and pricing are not affected by the usual supply-and-demand forces."